0
155
The dollar index broke a narrow range, which was the last 12 sessions, and renewed the maximum.
What will happen: the resumption or continuation of a trend of consolidation?
Schedule EUROUSD looks somewhat different: here we saw no consolidation and a weak upward trend.
I note that one of the main drivers of this trend are shopping for EUROJPY.
The reason for the fall of the main components of the dollar index EURO nearly 200 points on Friday was the speech Draghi.
In his speech, Draghi expressed strong concerns that the decline in inflation will continue and declared its readiness to take action "without delay" if needed.
I think that the fears of inflation is justified because, as I wrote, deflationary processes that are now taking place on a global scale, have very specific source - the fall of the Japanese yen as a result of unprecedented measures of the Bank of Japan.
Eurozone in this regard is most vulnerable because of the nature of the composition of the index inflation.
October 31 The Bank of Japan has taken new measures, and I think that talking about a strong threat Draghi was referring to the event.
The yen fell against other currencies by about 10%, and of course it will cause a new wave of deflation.
The question is when it will be reflected in the index of consumer inflation?
I do not think it would happen so fast that next week we will see a decline in HICP (the main indicator of inflation in the euro area) to 0.1% or 0.2%.
Most likely, the effect of recent measures BOJ will begin to appear in the February-March next year.
So I think that the reaction to the speech Draghi was largely emotional, and, given the degree of the previous decline, further movement down EUROUSD hardly justified.
Although the decline to 1.22 is possible, but I think that eventually break EUROUSD would technically false, and in December we will see EUROUSD somewhere in the region of at least 1.26-1,27. McAuley NICHOLAS LUDANOV
